Society Insurance No Payout for Bar/Restaurant Covid-19 Losses Iowa Class Action

Many businesses have suffered shutdowns because of the Covid-19 pandemic. This is one of a number of class actions brought by some of those businesses against their insurance companies, demanding payment for their business losses. The complaint for this class action alleges that Society Insurance has refused to pay those business losses under the policies it issued.

The plaintiffs are two owners of bars and/or restaurants: RSV Enterprises, Inc., which does business as Drake Diner, and MJPD Ventures, LLC, which does business as Wine Styles of Ankeny. They are both located in Iowa, and they both were forced to close by an order the Governor of Iowa issued on March 17, 2020.

Although they were officially permitted to reopen after April 27, 2020, they had to observe requirements that restricted the amount of business they could accommodate, including a reduction of operating capacity to 50% and limits on the number of people in groups. The complaint alleges that the closure orders and restrictions have meant that the plaintiffs have had to “halt ordinary operations, resulting in substantial lost revenues and forcing Plaintiffs to lay off the majority of their employees.”

Both policies were “all risk” policies, which means that they must cover loss from all causes except those specifically excluded. The policies do not exclude losses caused by pandemics.

The policies agreed that Society would pay for losses of business income “due to necessary suspension” of operations caused by “direct physical loss of or damage to covered property…”

The complaint quotes the policies as saying that “suspension” means (1) “the partial slowdown or complete cessation of your business activities” or (2) “that a part or all of the described premises is rendered un-tenantable if coverage for Business Income applies.”

They also promise to pay Extra Expenses that “would have not [been] incurred if there had been no direct physical loss or damage to covered property at the described premises.” Also included is coverage for Civil Authority, when the losses and extra expenses “caused by an action of civil authority that prohibits access” to the premises. Also covered is losses for a suspension of business caused by “contamination.”

However, Society Insurance claims that the coronavirus does not involve “physical loss” and therefore is not covered by the policies.

The class for this action is all restaurants, bars, and event or hospitality services located and doing business in Iowa that are insured by Society Insurance and that have incurred losses or interruptions because of the closure orders, and that have either (a) made a claim with Society and been denied a payout for the losses or (b) have not made a claim but are similarly situated to the plaintiffs in this case so that a denial is expected.

Article Type: Lawsuit
Topic: Insurance

Most Recent Case Event

Society Insurance No Payout for Bar/Restaurant Covid-19 Losses Iowa Complaint

August 12, 2020

Many businesses have suffered shutdowns because of the Covid-19 pandemic. This is one of a number of class actions brought by some of those businesses against their insurance companies, demanding payment for their business losses. The complaint for this class action alleges that Society Insurance has refused to pay those business losses under the policies it issued.

Society Insurance No Payout for Bar/Restaurant Covid-19 Losses Iowa Complaint

Case Event History

Society Insurance No Payout for Bar/Restaurant Covid-19 Losses Iowa Complaint

August 12, 2020

Many businesses have suffered shutdowns because of the Covid-19 pandemic. This is one of a number of class actions brought by some of those businesses against their insurance companies, demanding payment for their business losses. The complaint for this class action alleges that Society Insurance has refused to pay those business losses under the policies it issued.

Society Insurance No Payout for Bar/Restaurant Covid-19 Losses Iowa Complaint
Tags: Business Insurance, Covid-19 Related, Denial of Benefits, Insurance